SCHEMES FOR WOMEN ENTREPRENEURSBY:-ANUBHA JAINARNISHA BAHLEKTA PALIWALINDRA SINGH

“Empowering women entrepreneurs is considered essential for achieving the goals of sustainable and inclusive development.” Women owned businesses are increasing over the world. The hidden entrepreneurial potential of women has been gradually coming to the fore with the changing socio political factors in society. Skill, knowledge and adaptability in business are the main reasons for women to emerge into business ventures.

A strong desire to do something positive is an inbuilt quality of entrepreneurial woman, who is capable of contributing values in both family and social life. With the advent of media, women are becoming aware of their own potential and also opportunities for work and personal advancement. The glass ceilings are shattered and women are new working in every line of business from papad making to power cables. They are flourishing as designers, interior decorators, exporters, publishers, garment manufacturers and still exploring new avenues of economic participation.

SCHEMES

SECTORS PROVIDING SCHEMES

SCHEMES FOR WOMENENTREPRENEURS

BANKS

SME &

MSME

GOVT.

TRADE RELATED ENTREPRENEURSHIP ASSISTANCE AND DEVELOPMENT SCHEME FOR WOMEN (TREAD).

MICRO & SMALL ENTERPRISES CLUSTER DEVELOPMENT PROGRAMME (MSECDP).

CREDIT GUARANTEE FUND SCHEME FOR MICRO AND SMALL ENTREPRISES

STREE SHAKTI PACKAGE FOR WOMEN ENTREPRENEURS

ANNAPURNA- SCHEME FOR FINANCING WOMEN FOR ESTABLISHING FOOD CATERING UNITS

T REA D

It envisages economic empowerment of women through the development of their entrepreneurial skills in non-farm activities.

Under the scheme, the Central government gives a grant of up to 30 per cent of the total project cost to non-government organizations (NGOs) for promoting entrepreneurship among women. The remaining 70 per cent is financed by the lending agency as a loan for undertaking activities envisaged in the project.

GOI grant upto Rs.1 lakh per programme to training institutions /NGOs for imparting training to the women entrepreneurs, subject to these institutions/NGOs bring their share to the extent of minimum 25% of GOI grant and 10% in case of NER.

Need-based GoI grants upto Rs.5 lakh to National Entrepreneurship Development Institutions and any other institutions of repute for undertaking field surveys, research studies, evaluation studies, designing of training modules etc.

Operationalization of the Scheme

The scheme envisages that Women Associations/NGOs/SHGs should prepare composite bankable proposals for a group of women entrepreneurs, and submit to the office of the DC (MSME) for forwarding to the Banks for their appraisal. Bank examines the proposal and issues approval. 30% of the loan amount is sanctioned as grant and made available to the bank by office of DC (MSME) for further disbursement to NGOs.

MSECDP

A cluster is defined as a group of enterprises, ideally having 100 members, producing same/similar products/services. The Cluster Development Programme (CDP) being implemented envisages diagnostic study of identified clusters of traditional skill-based MSEs to identify appropriate technologies and their providers and to facilitate adoption of available technology meeting the specific needs of the end users. The Cluster Development aims at enhanced competitiveness, technology improvement, adoption of best manufacturing practices, marketing of products, employment generation etc. The scheme provides assistance for capacity building, common facilities, marketing etc. the delivery, assimilation and diffusion of the identified technology from its producers to the recipient user/cluster of small enterprises.

TYPE OF INTERVENTIONS

Soft interventions: assistance available for soft interventions has varied in the range of Rs.25 – 35 lakh per cluster. Currently we have an internal ceiling of Rs.10 lakh for soft intervention under this Scheme.

Hard Interventions : intervention the contribution from the M/o MSME varies between 30-80% of the total project cost, but in the case of clusters owned and managed by women entrepreneurs, contribution of the M/o MSME could be upto 90% of the project cost.

Creation of physical infrastructure: women enterprises central grant of 40% of the project cost subject to a maximum of Rs.2 crore is available. The Ministry of MSME is making efforts to enhance the quantum of grant to 80% in a project of Rs.10 crore.

Operationalization of the scheme

A Cluster Development Executive (CDE) is required for executing and monitoring all soft interventions in a cluster. Normally, a CDE can be a DIC Officer/MSME-DI officer/retired expert or even hired person from Non-Government Sector.

The hard interventions in a cluster and creation of physical infrastructure require to set up a users body/special purpose vehicle which could be society/trust/company to be formed by the cluster beneficiaries.

CREDIT GUARANTEE FUND SCHEME FOR MICRO AND SMALL ENTREPRISES

The Scheme was launched in August 2000 to ensure better flow of credit to micro and small enterprises by minimizing the risk perception of financial institutions and banks in lending without collateral security. Under the scheme, guarantee cover is provided to collateral free credit facility extended by member lending institutions (MLIs) to the new as well as existing micro and small enterprises on loans up to Rs.50 lakh. The guarantee cover available is up to 75% of the loans extended. The extent of guarantee cover is 80% for (i) micro enterprises for loans up to Rs.5 lakh; (ii) MSEs operated and/or owned by women; and (iii) all loans in the North-East Region. The lending institutions availing guarantee from the Trust have to pay one time guarantee fee of 1.5% and service charges of 0.75% per annum of the credit facility sanctioned. For loans up to Rs.5 lakh, the one time guarantee fee is 1% and service charges are 0.5% per annum of the credit facility sanctioned.

BANKS SCHEMES

ANNAPURNA- SCHEME FOR FINANCING WOMEN. STREE SHAKTI PACKAGE FOR WOMEN WOMEN ENTREPRENEUR DEVELOPMENT

SCHEME(WEDS) CENT KALYANI DENA SHAKTI SCHEME PUNJAB & SIND BANK’S UDYOGINI SCHEME OBC’S MAHILA VIKAS YOJNA MAHILA UDYAM NIDHI SCHEME

ANNAPURNA

EligibilityWomen (both individual and  Partnership firms)

PurposeFor  establishing food Catering Unit for selling tiffin/food/lunch packs etc.,

Extent of FinanceMaximum loan of Rs.50000/-

Type of loanComposite Term Loan (Working Capital portion will be within 50% of CTL)

Purpose of loanTerm Loan component can be used for purchase of utensils and cutlery, gas connection, Refrigerator, Mixer cum Grinder, Hot case, Utensil stand, Tiffin boxes, Working table, Water filter etc.

RepaymentUpto 36 monthly installments including one month moratorium period.

Margin10%

Rate of InterestAs per prevailing rates

SecurityHypothecation of assets created out of Bank Loan

GuaranteeOne guarantor (with sufficient means) acceptable to the Bank

 

STREE SHAKTI PACKAGE FOR WOMEN ENTREPRENEURS

Women Entrepreneurs comprise those Small Scale Units managed by one or more women entrepreneurs who have stake not less than 51% of the equity.

The important features of the package are:The entrepreneurs who have undergone EDP conducted by State level Agencies or programmes  co-sponsored/sponsored by Bank are eligible for financial  assistance Branch Manager and the field Staff will provide necessary inputs and assistance to those women who do not plan to set up full-fledged industrial ventures but would like to do something at home.

Concession in Margin :

Category CategoryLimit Slab in

Rs.

Margin concession

Retail traders Over Rs. 5000/- upto Rs. 25000/-Over Rs. 25000/- upto Rs. 1.00 lac

NIL5%

Business enterprises

Upto Rs. 25000/-Over Rs.25000/- upto Rs. 1 lakh

NIL5%

Professionals & self-employed women

Upto Rs. 25000/-Over Rs. 25000/-

Nil5%

SSI Upto Rs. 25000/-Above Rs. 25000/-

Nil5%

Interest concessions: No interest concession in respect of SSI units

enjoying credit limits over Rs.25000/- but up to Rs.2 lacs

Above Rs.2 lacs and up to Rs.50 lacs, interest rate lower by 0.50% than the applicable rate

For Small Business enterprises under the scheme, interest rate lower by 0.50% than the applicable rate

For advances  to professionals and self employed persons interest rate lower by 0.50% than the applicable rate

No interest concession to advances granted to private retail traders

WOMEN ENTERPRISE DEVELOPMENT SCHEME

Objective- To provide financial assistance to women entrepreneurs for taking up business ventures. Existing business ventures will also be eligible under the scheme for expansion, modernization and diversification.

Target Group- Skilled women entrepreneurs in the age group of 18 - 50 years.

Eligibility-Any viable income generating activity including small business trade

Nature of Assistance-Soft loan and Term loan Extent of Assistance- Soft loan: 25%, Term loan: 60%.

Project cost (including working capital)-Should not exceed Rs. 5.00 lakh

Promoter’s Contribution- Minimum 15%. Security-First charge on assets financed by

the Corporation. Eligible units will be covered under CGFTSI (Credit Guarantee Fund Trust for Small Industries).

Rate of Interest Soft loan: Service charge @ 1%. Term loan : At PLR Repayment-3 -7 years. Documentation-As per usual procedure of

the Corporation

CENT KALYANI

This scheme is specially introduced to offer financial assistance to Women Entrepreneurs for economic pursuits in Industry, Agriculture and Allied Activities, Business or Profession.  The bank with network of branches spread throughout the country welcomes women entrepreneurs to avail financial assistance for pursuing vacations to their choice.

Credit facilities are available for Women Entrepreneurs for the following:

a) Small Business b) Professional and Self Employed c) Retail Trade d) Village and Cottage. Tiny Industries e) Small Scale Industries f) Agriculture & Allied Activities g) Government Sponsored Programmes

a) Small Business: For Entrepreneurs who intend to provide service (not a professional service) such as setting up to small lunch/canteen, mobile restaurant, circulating library etc.b) Professional And Self Employed:  Entrepreneurs who are specially qualified / skilled and experienced like Doctors, Chartered Accountants, Engineers or trained in Art or Craft etc.c) Retail Trade:  For entrepreneurs who intend to engage in retail trading of various commodities.d) Village and Cottage/Tiny Industries:  For entrepreneurs who are engaged in manufacturing, processing, preservation and services such as Handloom, Weaving Handicraft, Food-processing, Garment making etc. in village and small towns with a population not exceeding 50,000/- utilizing locally available resources/skills.e) MSME: Micro, Small and Medium Enterprises- To start a unit engages in manufacture, processing or preservation of goods.

f) Agriculture & allied Activities:  For women entrepreneurs who are engaged/intend to engage in agriculture and allied activities, such as raising of crops, floriculture, fisheries, bee-keeping, nursery, sericulture etc. and also trading in agriculture inputs.g) Government Sponsored Programme:  Apart from the above schemes, women entrepreneurs are also financed under the various Government Sponsored Programmes where Capital subsidies are available. Other terms and conditions for the above facilities under Cent Kalyani i.e. quantum of loan, margin, interest, security, repayment, documentation etc. are as applicable under their respective schemes.

Dena Bank under the Dena Shakti scheme promotes women entrepreneurship by funding a number of activities and giving a concession of 0.25% on interest rate. The scheme initially covered only the manufacturing sector, but it has now been extended to agriculture and allied activities, small enterprises, micro and small (manufacturing and service) enterprises, retail trade, micro-credit, education and housing.

As per the bank’s website, the loan ceiling is described as follows, “The maximum ceiling limits that can be considered for financing to women beneficiaries under this scheme will be as per the directives of RBI stipulated for various sectors under priority sector such as loans up to Rs 20 lakh under retail trade, Rs 20 lakh under education and housing and Rs 50,000 under micro credit as well as the bank’s specific schemes circulated to branches/offices from time to time.” Considering the fact that a bank has to disburse 5% of the previous year’s adjusted net bank credit (ANBC) to women under all schemes, Dena Bank has a target of approximately Rs 1,185 crore, according to a source.

Dena Shakti Scheme for Women Entrepreneurs

PUNJAB & SIND’S BANKS UDYOGINI SCHEME

Punjab & Sind Bank’s Udyogini Scheme encourages women entrepreneurs to avail the loans on liberal terms and exclusive catering of credit under Direct agriculture activities, Tiny SSI sector, Business enterprises, Retail traders, Professional and Self employed etc.

OBC’S ORIENTAL MAHILA VIKAS YOJNA

Under the scheme, no collateral security is required up to Rs 10 lakh and in the case of small-scale industries (SSI) no collateral security is required for up to Rs 25 lakh. The bank’s website states, “Only hypothecation of assets created out of the bank’s finance will be taken as security.” When contacted, a senior bank official said, OBC is one of the banks that have reached its target of disbursing 5% of the previous year’s ANBC. Besides, the bank is also actively engaged in providing micro-credit by providing doorstep services to rural women.

MAHILA UDYAM NIDHI SCHEME

Eligible borrowers: All the women entrepreneurs who are interested for setting up new projects in tiny/small scale sectors or rehabilitation of viable sick SSI units are eligible for the purpose. Existing tiny and small scale industrial units and service enterprises undertaking expansion, modernization, technology up gradation and diversification can avail such benefits.

Purpose: To meet gap in equity. Norms: Scheme operated through SFCs/twin functions

SUDCs/scheduled commercial banks/scheduled urban co-operative Banks.

Soft loan limit: 25% of project subject to a maximum of Rs. 25 lakhs per project.

Service charges:1% p.a. on soft loan.

SOME TIPS

Research the various schemes availableBefore approaching a bank, one should be aware of the various schemes that banks offer. This helps in being more practical and knowing which schemes you are eligible for. According to Uma Reddy, “You should be very well equipped with the various schemes. It prepares you to go to a official and demand to be funded under a scheme and benefit from it.”

Try to market your product firstOne of the major difficulties a woman faces is marketing. Even banks are very skeptical about this while extending loans. Prof. Prabhu says, “Before starting up, I would ideally advice women to first test their product in the local market. They can invest some money from their pockets and get a small amount of their product manufactured by a local manufacturer. They can then try selling their product in the market. This helps in not only understanding the business better, but also when approaching the bank.”

Be thoroughly aware of your business planCreating a business plan is of utmost importance. However, Uma Reddy explains that, “Many a times what happens is that they sit with consultants to make the project report. In that case, it is very important to know the details of financial documents very well such as what is your debt equity ratio, when will be your break even etc.” Prof. Prabhu corroborates the point and says, “Sometimes, what happens is that they go too early to the bank and when the banks ask questions they get scared. Then, the banks might as well say, why should I give you loan when you even haven’t thought of this.”

Read loan documents carefullyYou might have heard this statement many times, but ignored it. When going for a loan, it is extremely important to sit with the banker and understand all clauses and calculations. Anjana Vivek, founder of VentureBean Consulting, says, “You have to think through all scenarios before getting into a loan agreement. People often only look at the interest rate number, but there can be many hidden things.” She explains, “You might have taken a loan for, say, three years, but if your business does well and you want to pay the loan back, then there might be a pre-payment penalty that you may not have been aware of. Another thing is that often the interest rate is calculated at the end of the month, but if you have paid the loan on say the 5th of the month, then ideally the interest should be calculated for 25 days and not for 31 days.”

Join a women’s networkThis helps in keeping in touch with other women entrepreneurs who are already in the field. This also aids in learning from the experience of other women. Another added advantage is that at times it helps in networking with bank officials. There are a number of such organizations such as AWAKE, EMERG and FIWE.

SCHEMES AT A GLANCE

BANKS SCHEMES

Bank of India Priyadarshini Yojna

Canara Bank CAN Mahila

Central Bank of India Cent Kalyani

Dena Bank Dena Shakti

Oriental Bank of Commerce Orient Mahila Vikas Yojna

Punjab National Bank Mahila Udyam Nidhi Scheme

Punjab & Sind Bank Udyogini Scheme

State Bank of India Stree Shakti Package

State bank of Mysore Stree Shakti

SIDBI Mahila Udyam Nidhi

GOVT. SCHEMES

PRIME MINISTER’S EMPLOYMENT GUARANTEE SCHEME

DIC SCHEME PRIME MINISTER’S EMPLOYMENT GENERATION

PROGRAMME (PMEGP) KVIC

PRIME MINISTER’S EMPLOYMENT GUARANTEE SCHEME

Maximum age of 35 years, with qualification- X th pass

Assistance by way of loans up to 95% of project cost

15% subsidy is made available

Subsidy of up to 15% or Rs.7,500, whichever lesser provided by government of India

Parents of the candidates cannot have annual income exceeding Rs.24,000

DIC SCHEME

Encouragement to start women entrepreneurship in areas with population of less than Rs. 1 Lakh

Investment in machinery up to Rs.2 Lakh is allowed

20% of this investment is granted as seed capital

For backward classes, the seed capital is up to 30%

The interest rate is 4%

Remaining capital needs to be financed by banks/financial institutions

PMEGP

the margin money subsidy provided to women entrepreneurs has been increased to 35 per cent in rural areas and 25 per cent in urban areas, compared to 25 per cent and 15 per cent respectively for other general category beneficiaries.

KVIC

KVIC disbursed Rs 312.68 crore as margin money subsidy in 2011-12, compared to Rs 277.63 crore in 2010-11 — an increase of about 12 per cent. The number of units assisted increased by 17 per cent to 14,210 in 2011-12, from 12,134 units in 2010-11.

SCHEMES OF WOMEN & CHILD DEVELOPMENT

Support to Training and Employment Programme for Women (STEP) Swayam Siddha

Schemes of Kerala State Women’s Development Corporationa) Self employment loan programmesb) Educational loan schemesc) Single women benefit schemesd) Job oriented training programmese) Marketing support for women entrepreneursf) Auto rickshaw / school van’s driver scheme

Kerala Government’s Women Industries Programme Delhi Government’s Stree Shakti Project Schemes of Delhi Commission for Women (Related to Skill development a

nd training) Incentives to Women Entrepreneurs Scheme, 2008, Government of Goa Magalir Udavi Scheme, Pudhucherry Government Financing Schemes by Banks/ Financial Institution's

WOMEN ASSOCIATIONS

S.no. Association Name Website

1 Federation of Indian Women Entrepreneurs (FIWE) http://www.fiwe.org/

2 Consortium of Women Entrepreneurs(CWEI) http://www.cwei.org/

3 Association of Lady Entrepreneurs of Andhra Pradesh http://www.aleap.org/index.html

4Association of Women Entrepreneurs of Karnataka (AWAKE)

http://awakeindia.org.in/

5 Self-Employed Women's Association (SEWA) http://www.sewa.org/

6 Women Entrepreneurs Promotion Association (WEPA)

7 The Marketing Organisation of Women Enterprises (MOOWES)

8 Bihar Mahila Udyog SanghBihar Mahila Udyog Sangh http://www.biharmahilaudyogsangh

.com/9 Mahakaushal Association of Woman

Entrepreneurs (MAWE) http://www.maweindia.com/

10 SAARC Chamber Women Entrepreneurship Council http://www.scwec.com/index.htm

11 Women Entrepreneurs Association of Tamil Nadu (WEAT)

12 TiE Stree Shakti (TSS) http://www.tiestreeshakti.org/

13 Women Empowerment Corporation http://www.wecindia.org

EXAMPLE

Vinnie Chaddha of Reboot Shoe Laundry advocates the Dena Shakti scheme. She says, “I was a participant at the Business Baazigar reality show on Zee TV that was aired three years back. My idea was one of the favorites of a judge, so he introduced me to Dena Bank.” The bank, which was convinced of the idea, granted her a loan under the scheme. She says, “The bank was quick to offer a me a loan of Rs 3 lakh. The entire loan procedure took just about a little more than a week’s time and around five to six visits.” On being quizzed whether “knowing somebody helped” to speed up things, she was quick to reply, “Funding depends on a number of things such as the loan amount, the concept etc. In my case, the loan amount was small, the concept was very fresh and I provided a guarantor for the loan amount.”

WOMEN WORK PARTICIPATION

Country Percentage

India (1970-1971) 14.2

India (1980-1981) 19.7

India (1990-1991) 22.3

India (2000-2011) 31.6

USA 45

UK 43

Indonesia 40

Sri Lanka 35

Brazil 35

CONCLUSION

Independence brought promise of equality of opportunity in all sphere to the Indian women and laws guaranteeing for their equal rights of participation in political process and equal opportunities and rights in education and employment were enacted. But unfortunately, the government sponsored development activities have benefited only a small section of women. The large majority of them are still unaffected by change and development activities have benefited only a small section of women i.e. the urban middle class women.